106 Swiss Banks Enter IRS Voluntary Disclosure Program

Kevin Thorn of the Thorn Law Group discusses the recent disclosure that over 106 Swiss banks have entered the DOJ and IRS Voluntary Disclosure Program for Banks in exchange for non-prosecution deals, and are now willing to identify taxpayers with undisclosed offshore bank accounts.

Kevin E. Thorn

Foreign banks are making voluntary disclosures, and so should taxpayers.

Washington, DC (PRWEB) February 04, 2014

The Assistant Attorney General of the Tax Division of the U.S. Department of Justice just announced that 106 Swiss banks filed paperwork by the December 31, 2013 deadline to enter the IRS’ Voluntary Disclosure Program for Banks. (See “U.S. says has 106 Swiss requests to join anti-tax-dodging deal" Reuters, January 25, 2014, at http://www.reut.rs/LIU2AN.) In exchange for non-prosecution agreements from the DOJ, the Swiss banks are expected to disclose information identifying United States taxpayers who have not declared their overseas accounts to the IRS. (See the “Joint Statement between U.S. Department of Justice and the Swiss Federal Department of Finance”, signed Aug. 29, 2013, at http://www.justice.gov/iso/opa/resources/7532013829164644664074.pdf.)

With so many banks now participating in the Voluntary Disclosure Program for banks, it is very important that U.S. Taxpayers with undisclosed overseas accounts come forward. Kevin Thorn, Managing Member of Thorn Law Group, cautions that once the Swiss banks identify them to the IRS, U.S. taxpayers with undisclosed overseas accounts will no longer qualify for the IRS Voluntary Disclosure program or other forms of leniency from the IRS.

In exchange for the 106 banks’ cooperation and agreement to disclose foreign account information to the IRS, the Department of Justice has agreed to not prosecute them. This “crack” in the Swiss banking secrecy system has now opened a floodgate of information exchange between the United States and Swiss governments.

Thorn, a former IRS attorney who now represents taxpayers with offshore accounts before the IRS and DOJ, anticipates the information the IRS will receive from the foreign banks will allow the U.S. to identify and prosecute taxpayers who have not been reporting their foreign accounts. This is because banks participating in the Voluntary Disclosure program will be providing information about account holders, account balances and transactions to the Department of Justice and IRS. (See the “Joint Statement between U.S. Department of Justice and the Swiss Federal Department of Finance”, signed Aug. 29, 2013, at http://www.justice.gov/iso/opa/resources/7532013829164644664074.pdf.)

The 106 banks will also be identifying bankers who helped U.S. account holders. Thorn cautions that this will likely lead to the IRS and Department of Justice gaining information about offshore accounts outside of the 106 banks formally disclosing, and even outside of Switzerland, as many bankers moved to different banks and jurisdicitions.

Kevin Thorn, states that U.S. taxpayers with undisclosed offshore accounts should come into compliance with the IRS immediately. He advises American taxpayers to enter the IRS Voluntary Disclosure program to settle their matters, he points out that the penalty for not disclosing offshore accounts can be devastating. “Foreign banks are making voluntary disclosures to avoid prosecution and the most severe penalties, and so should account holders. Once the DOJ and the IRS obtain the identities of account holders from these overseas banks, they will more than likely not allow those account holders to enter into the IRS Voluntary Disclosure program.” He adds that “compliance may be significantly more costly and more difficult for taxpayers who do not come forward before the banks identify them to the Department of Justice and the Internal Revenue Service,” and notes that “the IRS and the DOJ will continue to put pressure on all foreign banks in order to obtain U.S. Taxpayer information and bring those who have undisclosed overseas bank accounts back into compliance."

Thorn also notes that many Swiss banks are sending letters to accountholders informing them of the bank’s decision to participate in the voluntary disclosure program and advising them to do the same and states, “If your bank sends you a letter advising you to enter the IRS Voluntary Disclosure program, consider it a warning that they are going to turn you and your account information over to the DOJ and IRS very soon.”

The bank voluntary disclosure program is only available to Swiss banks not already under investigation by the U.S. In addition to Swiss banks making voluntary disclosures, the U.S. is currently investigating 14 Swiss banks, including Basler Kantonalbank, Credit Suisse, Julius Baer, Pictet & Cie, HSBC Privatbank, Bank Leumi and Zürcher Kantonalbank.

For additional information on the news that is the subject of this release, contact Kevin E. Thorn, Managing Partner of Thorn Law Group at 202-270-7273 or visit us at http://www.thorntaxlaw.com/.
About Thorn Law Group, PLLC: Thorn Law Group, PLLC is a law firm dedicated to helping clients resolve complicated tax, criminal tax, and international tax problems.